US biofuels subsidies and CO2 emissions: An empirical test for a weak and a strong green paradox

Quentin Grafton, Thomas Kompas, Ngo Van Long, Hang To

    Research output: Contribution to journalArticle

    Abstract

    Using energy data over the period 1981-2011 we find that US biofuels subsidies and production have provided a perverse incentive for US fossil fuel producers to increase their rate of extraction that has generated a weak green paradox. Further, in the short-run if the reduction in the CO2 emissions from a one-to-one substitution between biofuels and fossil fuels is less than 26 percent, or less than 57 percent if long run effect is taken into account, then US biofuels production is likely to have resulted in a strong green paradox. These results indicate that subsidies for first generation biofuels, which yield a low level of per unit CO2 emission reduction compared to fossil fuels, might have contributed to additional net CO2 emissions over the study period.
    Original languageEnglish
    Pages (from-to)550-555
    JournalEnergy Policy
    Volume68
    DOIs
    Publication statusPublished - 2014

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